Application to shut down SSL set for open court
Published:Sunday | July 23, 2023 | 12:14 AMJovan Johnson - Senior Staff Reporter
The Supreme Court has ruled that the Government’s application to shut down fraud-hit investment firm Stocks & Securities Limited (SSL) will be heard in open court to allow the public and investors to follow the proceedings.
Justice David Batts has also ordered that the application for permission being sought by the Financial Services Commission (FSC) to wind up the company will be tried in November, but after the outcome of a separate trial that month in which the FSC is seeking to dislodge Caydion Campbell, an SSL-appointed trustee.
The judge made the orders on Thursday during a hearing of the wind-up application that the FSC filed in March. The FSC is the government body that regulates the securities industry.
The FSC, which currently has temporary management of SSL, wants to close down the firm, arguing that it does not have enough money to pay its debts.
Thursday’s hearing was held in camera, which means the public, including journalists, could not attend.
King’s Counsel Caroline Hay, who is representing Campbell, said she raised a preliminary objection, arguing that the FSC was abusing the court’s processes because it is also seeking permission to wind up SSL in two differently filed court cases.
TOOK CONTROL
In January, the regulator sought and obtained an injunction blocking Campbell from dealing with SSL’s assets. He was appointed by SSL’s then management on January 16, a day before the FSC took control of the company and appointed Kenneth Tomlinson as temporary manager.
In February, the FSC amended the January application to include an alternate request to wind up SSL if the court, after the enquiry into Campbell’s appointment and the solvency of the company, found something wrong with Campbell’s appointment. Hay said it seemed that the FSC was seeking the same relief in two different claims.
Earlier this month, Justice Batts, who is also the judge in the trusteeship case, set the trial of that matter for November 1 to 3. A pre-trial review will take place on October 2.
For the case involving the application filed in March, Justice Batts on Thursday said it must await the outcome of the trusteeship case. A pre-trial review is also set for October.
Solvency-related matters are typically held in chambers, but Batts reportedly indicated that the SSL matter must be heard in open court so creditors of SSL and other members of the public may observe the proceedings.
“The point of that is for the process to be transparent so people with legitimate claims can come forward and make representations to protect their positions,” Hay told The Sunday Gleaner.
The senior lawyer said if the FSC fails to establish its case that her client was not properly appointed, “then the injunction needs to go and [Campbell would] now be permitted to do his work, which is to call in the claims and look at what can be distributed to protect the position of the company. They (FSC) are saying that the company is insolvent; the question is: Was the company insolvent when they interfered?”
ALLEGED FRAUD
The FSC’s claim of SSL’s “insolvency” is being sought on the basis of findings from Tomlinson, who the FSC installed as temporary manager on January 17, seven days after receiving reports of a multibillion-dollar fraud at the entity.
However, the former directors had earlier produced audited accounts that showed solvency as at mid-2022.
Up to January 31, SSL had assets of $1.1 billion and liabilities of $1.2 billion, according to FSC’s court filings in March.
Athletics icon Usain Bolt is among some 40 SSL clients who have allegedly been fleeced of more than $3 billion in a fraud that the authorities say stretches back at least a decade.
Bolt and another investor Jean Forde have filed separate lawsuits against SSL and Jean-Ann Panton, a former SSL client relationship manager who is the only person charged in the case so far.
The FSC has faced scrutiny after Gleaner revelations that for more than a decade it flagged SSL as a “problem institution” with a “culture of non-compliance and mismanagement of client funds”.
However, despite the findings from its own investigators, SSL has never lost its licence and the public was never told of the concerns.